epa’s final clean power plan: overview steve burr aqd, sip section september 1, 2015
TRANSCRIPT
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EPA’s Final Clean Power Plan: Overview
Steve BurrAQD, SIP Section
September 1, 2015
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Slide 2
Overview
Status
Review of Clean Power Plan Basics
– Legal Basis
– BSER Building Blocks
Major Changes from Proposal
Initial Submittal
Regulatory Framework Options
Clean Energy Incentive Program (CEIP)
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Slide 3
CPP Status
On August 3, 2015, EPA Signed final CPP rule and published supporting
documents:– http://
www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants#CPP-final
Signed final NSPS for new, modified and reconstructed EGUs:– http://
www2.epa.gov/cleanpowerplan/carbon-pollution-standards-new-modified-and-reconstructed-power-plants
Proposed federal CPP rules for states that fail to submit a plan:– http://
www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants#federal-plan
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Slide 4
Legal Basis
Clean Air Act § 111: Standards of Performance for New Stationary Sources (NSPS)
Section 111(b) requires EPA to:– List categories of stationary sources that EPA finds
cause, or contribute significantly to, “air pollution which may reasonably be anticipated to endanger public health or welfare.”
– Promulgate “standards of performance” for emissions of air pollutants from new sources in the listed categories
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Slide 5
Legal Basis
Standard of Performance: § 111(a)(1) defines as a standard which– Reflects the emission limitation achievable from
the “best system of emission reduction” (BSER) that
– Taking cost, non-air quality environmental impacts and energy requirements into account
– “the Administrator determines has been adequately demonstrated.”
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Slide 6
Legal Basis
Section 111(d)– Requires EPA on adopting an NSPS to establish
guidelines and procedure for regulating existing sources that would be subject to the NSPS if they were new.
– The procedure must require states to submit a plan that “establishes standards for performance” (i.e. BSER) for covered existing sources
– If a state fails to submit a 111(d) plan or EPA disapproves a submitted plan, EPA must establish a plan for the state (similar to FIP under 110(c)).
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Slide 7
Legal Basis
NSPS– Proposed January 8, 2014 for GHG emissions from
new fossil-fuel fired electric generating units (EGU)– Proposed June 18, 2014 for modified and
reconstructed EGUs– Final rule for all 3 adopted August 3, 2015, same
date as final CPP CPP consists of 111(d) guidelines for same
sources
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Slide 8
BSER “Building Blocks”
Proposed BSER was based on “strategies, technologies and approaches already in widespread use by power companies and states”
Strategies include:– Measures to reduce the CO2 emissions rate of
individual generating units.– Measures to reduce the use of fossil-fuel fired
generating units.
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Slide 9
BSER “Building Blocks”
EPA proposed 4 “Building Blocks” (BB) as BSER:– BB1: Reduce carbon intensity of generation from
coal-fired units through heat-rate improvements.– BB2: Shift generation from coal-fired and oil- and
gas-fired steam turbines to natural-gas fired combined cycle (NGCC) units.
– BB3: Increase reliance on renewable energy generation, which has zero CO2 emissions.
– BB4: Reduce demand for fossil-fuel fired generation by improving energy efficiency of electricity consumers.
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Slide 10
BSER “Building Blocks”
State-Specific Goal Rates– Metric: lbs CO2/ MWh– Based on application of BSER over 2020-2029 to
state’s generation mix– Interim goal for 2020-2029 average– Final goal for 2030+– Arizona
• 1453 baseline• Assumed reduction to 778 by 2020 as result of BB2• 735 interim goal (49 % reduction)• 702 final goal (52 % reduction)
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11
Changes from Proposal
Proposal Goals based on application
of BSER to each state
Final Goals based on application
of BSER to 3 regions:– Eastern Interconnection– Western Interconnection– Texas Interconnection
Goals based on least stringent rate for any region
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12
Changes from Proposal
Proposal Single form of goal: state-
specific rate
Final Multiple forms:
– National uniform performance rates for 2 subcategories: NGCC and fossil fuel steam (FFS)
– State goals based on performance rate and mix of generation
– Mass-based goals
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13
Changes from Proposal
Proposal Full application of BB2 by
2020 assumed– In AZ = complete retirement
of coal generation by 2020
Final Application of BB2 phased
in beginning in 2022
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14
Changes from Proposal
Proposal Final
Energy efficiency (BB4) included in BSER and used to calculate goal
BB4 no longer used to calculate goal, but may be used for compliance
Utility-scale RE in operation in 2012 + “at-risk” nuclear counted in goal calculation and compliance
Not counted for either purpose– Effect is a “wash”
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15
Changes from Proposal
Proposal Wide range of state goal
rates:– Lowest: 215 (WA)– Highest: 1989 (Navajo)
Final Narrower range of goal
rates:– Lowest: 771 (3 states)– Highest: 1305 (5 states)
Arizona goals:– Interim: 735 (49 % reduction)– Final: 702 (52 % reduction)
Arizona goals:– 1,173 (24 % reduction)– 1,031 (34 % reduction)
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Slide 16
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Arizona Goal Rates
Proposal
lbs C
O2/
MW
h
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Arizona Goal Rates
ProposalFinal
lbs C
O2/
MW
h
Changes from Proposal
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17
Changes from Proposal
Proposal Rate-to-mass conversion
left to states
Trading allowed, but details unspecified
Final Rule establishes state mass-
based goals
Trading requirements and limitations established in rule for various emission standard types
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18
Changes from Proposal
Proposal “Portfolio approach”:
federal enforceability of measures other than emission standards required
Final “State measures approach”:
federal enforceability of measures other than emission standards not required; backstop required
No credit for early emission reductions; NODA sought comment
Clean Energy Incentive Program (CEIP)– Optional– Included in federal plan
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19
Changes from Proposal
Proposal Plan submission deadline:
6/30/2016 If initial submittal:
– 6/30/2017 deadline for single-state plans
– 6/30/2018 deadline for multi-state plans
Final Plan submission deadline:
9/6/2016 If initial submittal:
– 9/6/2017 update on progress– 9/6/2018 deadline for all
plans
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Slide 20
Initial Submittal
Must include– Identification of final plan approach or approaches,
including a description of progress made to date– Explanation of need for additional time to submit final
plan– Demonstration or description of
• Meaningful engagement with stakeholders, including vulnerable communities, during the initial submittal preparation period
• Opportunity for public comment on the initial submittal• Plans for engagement during development of the final plan
9/6/2017 update on progress: must include commitment to one approach and draft or proposed legislation or regulations
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Slide 21
Regulatory Framework Options
Goals– 2 Rate-Based
• Separate, nationally uniform, “performance rates” for fossil fuel steam (FFS) and NGCC
• State “rate-based CO2 goals” based on application of performance rates to each state’s 2012 generation mix
National Performance Rates (lbs CO 2/MWh)
Subcategory Interim FinalFossil Steam 1,534 1,305 NGCC 832 771
Arizona Rate-Based Goals (lbs CO 2/MWh)
Interim Final 1,173 1,031
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Slide 22
Regulatory Framework Options
Goals (cont’d)– 2 Mass-Based
• For existing EGUs only
• For existing EGUs with “new source complement”
– State plan must demonstrate achievement of one of these goals
Arizona Mass-Based Goals (short tons CO2)Interim Final
33,061,997 30,170,150
Arizona Mass-Based Goals with New Source Complement (short tons CO2)
Interim Final34,486,994 32,380,196
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Slide 23
Regulatory Framework Options
2 plan types:– Emission standards
• Imposes requirements solely on affected EGUs in the form of federally enforceable emission standards
• Emission standards suffice to achieve goal– State measures
• May impose emission standards that partially achieve goal or no emission standards at all
• Measures other than emission standards must be enforceable at state level but do not become federally enforceable
• Must demonstrate compliance with mass-based goal• Must establish backstop emission standards plan
Emission standard types (next page)
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24
Regulatory Framework Options
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Slide 25
Clean Energy Incentive Program
Eligible Projects – Located in or benefit a state implementing CEIP– Commence construction (RE) or operation (EE)
after submission of final plan– During 2020-2021, either (a) generate metered
MWh from any wind or solar resource or (b) result in quantified and verified electricity savings through demand side EE in low-income communities
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Slide 26
Clean Energy Incentive Program
Credits– Allocated from state budget for 2022-2029 interim
compliance period; EPA provides matching credits as the incentive for participation
– RE Projects: For every 2 MWh generated, project receives 1 ERC from state and 1 matching ERC from EPA
– EE Projects: For every 2 MWh generated, project receives 2 ERCs from state and 2 matching ERCs from EPA
– For mass-based program, project receives ERC equivalent in allowances; in TSD EPA applies emission factor of 0.8 short tons CO 2 per MWh FF generation